How a Reserve Account Can Help Your HOA

Your community association often needs to cover immediate expenses like insurance premiums, minor repairs or the costs of strategic investments. Setting up reserve accounts can be a secure way to grow those funds while retaining maximum liquidity.

Here are four criteria your associations should look for when considering reserve accounts.

1 Security

Governing documents or a financial policy may require FDIC insurance or a government-backed or other insured product with no risk to the principal investment. Security is an absolute priority and should be considered nonnegotiable when looking at financial products.

2 Liquidity

While most community associations make long-term plans for larger investments in properties, they may also need funds at any moment. Because emergencies or unexpected situations can arise without warning, be sure your associations can access reserve funds with relative ease.

3 Rate

A product that offers a steady, reliable rate of return is a must for ensuring association asset growth. This growth could provide the maximum funds possible to maintain and enhance property values.

4 Efficiency

Choose a banking partner that can efficiently and effectively offer the services that best fit your community associations.

With those four characteristics in mind, there are a number of HOA bank services that can accommodate HOA financial and investment needs.

HOA bank services options

Money Markets

Money Market accounts are a great way to fund projects that are going to happen on a short timeline. Funds are secure and gain steady interest while remaining accessible.

ICS®

ICS®, the IntraFi® Cash Service, can secure large deposits while maintaining access to and earning interest on funds placed into demand deposit accounts and money market deposit accounts. Deposits are eligible for protection above the $250,000 FDIC limit that is backed by the full faith and credit of the US government.

CDARS®

CDARS®, the IntraFi® Certificate of Deposit Account Registry Service®, is a convenient way to access FDIC insurance on CDs above the $250,000 FDIC threshold, earn CD-level rates and directly work with only one financial institution.

CD Ladders

CD Ladders are well-suited for projects that are going to happen in phases since they can be set to mature in 3-month, 6-month, 9-month and 12-month certificates. Customizing the amounts and lengths of multiple CDs can provide rolling access to funds as each term ends. Ladders provide greater fund liquidity and flexibility, all while keeping HOA funds protected. Plus, your associations get the efficiency of working with one bank that provides one summary statement.

Build a relationship with your financial institution

Whatever HOA banking service products work best for your community associations, it's important to work with a financial institution dedicated to effectively managing assets, building relationships and making complex needs simpler.

As a leader in community association banking, we focus on helping you grow your communities—and your business. Explore our deposit and reserve solutions to learn more.